About Brandon Roberts

Brandon Roberts has been a member since April 19th 2012, and has created 223 posts from scratch.

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127 Beware of the Illustration Beauty Contest

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Today we’re discussing the other “i” word–illustration. We are diving into how illustrations are manipulated to sell the sizzle and not so much about focusing on the substance.

It seems that far too many of the people working in the marketing department feel that they need to really “push the envelope” in terms of illustrating projected product performance. In other words, they like to distort reality to make their products seem a bit more attractive than they would otherwise be.

This is particularly true when it comes to variable and indexed products as it is somewhat easier to inflate things based on using unrealistic returns on the investment sub-accounts and/or indexed accounts.

We have seen illustrations that used static returns of 8-12% depending on the product and when we saw them as the “standards” of what is allowed have changed over the last few years.

There really is no academic argument as to why anything should be illustrated at rates this high, however, someone in marketing decided that it makes their product look really nice when shown these sorts of rates and that will convince people to buy.

What’s more… Read More…

126 What’s the Real Rate of Inflation?

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We’ve talked about a lot of scary financial concepts on the Insurance Pro Blog in the past and it seems as though few economic topics strike more fear in the hearts of Americans than unrelenting ‘i’ word. We are, of course, talking about inflation.

But what is this seemingly cryptic topic all about and why is it so frightening? Further, is it really the harbinger of death for our economy—or at least your personal financial life—so many others have suggested?

Probably not.

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125 Yet One More Problem With Your Company’s 401k

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Today we are discussing one of our favorite financial products…the 401k. We really wish you could see the red hot glow of the sarcasm light in our studio.

If you’ve been listening to the Financial Procast for any length of time, you will surely be familiar with our disdain for the 401k. It’s not necessarily that we think the product or idea is bad, we just think there’s been way too much emphasis placed on it as a tool to solve the retirement income woes of America.

Those who think the 401k will save them from the meow mix diet during retirement are surely destined to be disappointed. We have witnessed firsthand the problems that are created by having too much of your liquid net-worth invested in qualified plans of any kind.

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124 Certified Financial Planners do very little Planning

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The Certified Financial Planner designation stands as a testament of one’s dedication to excellence and superiority in the world of financial planning. Or at least that’s what the CFP Board and the designees want you to believe. And they’ve done a good job convincing the world that CFP® holders are the wise wizards of the retail financial services industry.

Our personal experience, however, hasn’t quite match up with the marketing machine’s hype…

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Even Bad Whole Life Insurance has worked out Pretty Well

Bad whole life insurance, the stuff that isn’t designed the way we suggest it should be, sometimes catches fire for its so-called poor returns. Those with something to sell you that isn’t life insurance (i.e. that competes for those dollars) like to focus on fees and talk about how terrible the product is. And in recent years, historical whole life insurance cash value performance reports from places like the now defunct Blease Research were used to try and claim that returns were mediocre and illustrations always overstated the performance of the policies.

But prior to the peak in interest rates seen in the late 80’s/early 90’s whole life projections often understated the performance of the product.  And when we go back beyond this point and look at a policy put in force several years prior, we see dramatically different returns. This is potentially really good news for the life insurance industry and its ability to deliver competitive returns on its products relative to the entire selection of financial products.

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